Summary of what Jim Slater said:
•Small companies[<£100m] massively
outperform large companies [10x]
•Use just one intelligent parameter and
beat the market
•Combine parameters to very strongly beat
the market
•AIM offers: IHT relief, business taper
relief and EIS; VCTs offer big tax relief
•CCCIC uses Zulu, REFS and charting for
buying and selling
?
As fans of Clinton Cards, we’ve watched the big price decline and notice
how the price suddenly jumps through the MA and then stays above it. Then
The MAs cross each other - a ‘golden cross’ - so we buy around 106p.
?
It looks like a trading range is being established so we draw two
parallel lines;
the price hits the lower line and we might have sold on a stop loss
but it quickly recovers.
?
Oh dear, the price starts bouncing along the bottom of the trading
range and then dives out of it,
cutting through the MA - we sell around 182p. Or, we’re more
cautious and sell at 172p,
when the two MAs cross, for a 43 % profit in under two years.
And then price rises and cuts the MA . . .
‘Winning on the stock market’
•‘It’s my story’ in iii about investor who
used Zulu and ‘centred moving averages’
•I bought second hand book written in ‘92
that is difficult to understand!
•Concentrates on probabilities and
charting; opposite of our fundamental
analysis
•Offers a complete investment method but
I’m focussing on his charting methods to
improve the timing of our buys and sales
•Some key concepts follow; further talk
with more charts and explanation?
Advanced charting
•Probability always wins in long term
•Being right 50% of the time will result in
losses due to dealing costs
•Strategy is to make money, not ‘hold
shares’
•80% of shares will follow main market so
only invest when market trend is up
•20% chance of beating a falling market
•Only invest when market is trending up
and share’s price is trending up
•Our Growth filter contains ‘relative
strength over 1 year>0’; Slater buys when
‘share is behaving like a winner’
•Sell when share dips, don’t worry about
market
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April '04
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[Excel’s] moving average lags in time;
a centred ma is simply moved back in
time by half the span, thus averaging the
price and the time.
Stop loss
•Must always use an automatic, percentage
stop loss
•Loose 50%: have to make 100% gain to
recover capital
•7.5% recommended
•Selling crystallises loss
•Stats say 2/3 of shares recover
•Only an ‘earthquake’ justifies not selling
•20-50% fall in a day
•Market still trending upwards
•Share has been trending up in last few
months
•No sinister press comments
•No other better share to invest in
Market trend changing?
•A trend continues until it ends
•CCCIC unit price is flagging!
FTSE100&250 look to me to have peaked
•A proper analysis next month
•Oil prices still increasing
•US company results disappointing
•Dow Jones at 6 month low; 3 days of
sharp drops
•Blair will raise NIC by 3% very soon
•Directors of AIM companies sell/buy=4.6;
market overpriced?
Download this
presentation from the
web site.
• www.cccic.co.uk
Next month
•Determining the market’s dominant trend
•Determining a share’s dominant trend
•Short term buying signals
•Channel analysis
•Lots of charts!